A health savings account (HSA) and a flexible spending account (FSA) are tax-advantaged vehicles that can be used to cover qualified healthcare expenses, such as weight-loss products and services. The IRS is very clear about what may or may not be a qualified medical expense related to weight loss. Your best approach is to work with the administrator of your HSA or FSA to determine what can or cannot be reimbursed. You cannot include in medical expenses the cost of meals that are not part of inpatient care.
See also the Weight Loss Program and Nutritional Supplements, below. If you deduct the cost of medical equipment or property in one year and sell it in a later year, you may have a taxable profit. The cost of the medical part must be stated separately in the insurance contract or given to you in a separate statement. HSA owners generally cannot include the cost of diet foods or beverages in medical expenses because they replace what is normally consumed to meet nutritional needs.
You can include in medical expenses the cost of meals at a hospital or similar institution if the main reason for being there is for medical care. You cannot include in medical expenses health club fees or amounts paid to improve general health or to relieve physical or mental discomfort unrelated to a particular medical condition. Medical expenses paid before the decedent's death are included in the calculation of any deduction for medical and dental expenses in the decedent's final income tax return. If you received workers' compensation and deducted medical expenses related to that injury, you must include workers' compensation in income up to the amount you deducted.
If you pay for medical expenses by check, the day you mail or deliver the check is usually the payment date. It also tells you how to report the deduction on your tax return and what to do if you sell medical goods or receive personal injury damages. You can also include in medical expenses the amounts you pay for transportation to and from drug treatment meetings in your community if the assistance is provided in accordance with medical advice that membership is necessary for the treatment of an illness involving excessive drug use. You can deduct on Schedule A (Form 1040) only the portion of your medical and dental expenses that is more than 7.5% of your adjusted gross income (AGI).
However, if the reimbursement exceeds the expense, see What happens if the insurance reimbursement exceeds your medical expenses, above. If you have qualifying health insurance that covers anyone besides you and your eligible family member (s), you may not be able to account for all of your payments. You can include in medical expenses the portion of the cost of Braille books and magazines for use by a person with visual impairment that is greater than the cost of regular printed editions. Whether you think you are pregnant, or that you are having trouble conceiving a baby, or want to make sure that you can no longer get pregnant or impregnate another person, the expenses surrounding your circumstance in connection with childbirth will be considered eligible medical expenses.
If you have to spend the night away from home for any medical reason (for example, if you seek treatment in a hospital that is not close to your home, or if you want to see a second opinion specialist), part of the cost of your out-of-town accommodation may be considered a qualifying medical expense.